The Benefits of Establishing business in Mauritius and hiring local workforce

We have been working in Mauritius since 2015, and we see that the country is developing at a very fast pace. In this article we will outline some of the benefits and most commonly asked questions by international companies looking to set-up their business in Mauritius.

Setting up business:

Mauritius Financial Services Commission is known to be a reputable regulator of the financial operations in Mauritius. A number of high profile fintech companies have applied and received authorizations in Mauritius for their brokerage, fund,virtual asset and payment operations.

What may be less known is that Mauritius has two authorizations that cater to international groups that wish to set-up their holding or headquarters in a beneficial environment.

1.     One of them is the Mauritius Global Treasury authorization

The Mauritius Global Treasury Activities (GTA) Licence provides multinational enterprises (MNEs) with an opportunity to establish or relocate their regional treasury management operations to Mauritius. Following the transition from its previous deemed tax credit system to a new partial tax exemption regime,aligned with OECD and EU guidelines, Mauritius has solidified its standing as a credible jurisdiction with substantial offerings. Its recent removal from the Financial Action Task Force’s (FATF) enhanced monitoring list has further strengthened its position as a reputable International Financial Centre (IFC).

The GTA Licence offers various advantages for MNEs, allowing them to base their regional treasury operations in a jurisdiction ranked first among African countries and 13th globally in the World Bank's ‘Ease of Doing Business 2020’ index.

Key benefits of operating in Mauritius include its efficient legal framework, a well-regulated financial environment, a competitive tax structure, and an extensive network of double tax treaties. Additionally, Mauritius boasts a well-educated, skilled workforce,along with access to cost- effective legal, accounting, and professional services, making it an attractive destination for businesses compared to other global jurisdictions.

The country is home to many of the world's leading banks, offering accounts in all major currencies without exchange control restrictions. These factors contribute to Mauritius’growing reputation as a premier hub for cross-border investments, especially into Africa and Asia.

Companies holding a GTA Licence must provide at least three treasury services to three or more related companies. These services may include:

·       Arranging credit facilities, whether from financial institutions in Mauritius or from surplus network funds.

·       Managing derivatives.

·       Offering corporate finance advisory services.

·       Overseeingcredit administration and control.

·       Handlingfactoring, forfeiting, and re-invoicing.

·       Managing guarantees, performance bonds, standby letters of credit, and remittances.

·       Managing funds for designated investments.

·       GTA Licence holders are eligible for a five-year corporate income tax holiday,provided they meet the licensing requirements. Additionally, there is no capital gains tax or withholding tax on dividends and interest in Mauritius.

·       Beyond the typical Global Business Company (GBC) licensing requirements, businesses with a GTA Licence must meet specific economic substance criteria, including:

·       Maintaining a physical office in Mauritius.

·       Employing at least four professionals, with one at a managerial level.

·       Incurring a minimum annual expenditure of MUR 2 million (approximately USD 60,000).

2.     Second authorization is the Global Headquarters Administration Licence

The Global Headquarters Administration (GHA) Licence, introduced in 2016, was designed to position Mauritius as a key regional financial and business hub.This licence allows multinational corporations to establish their regional administration, procurement, and accounting offices within the Mauritius International Financial Centre (IFC).

Since adopting a new partial tax exemption regime, aligned with EU and OECD standards, Mauritius has reasserted itself as a jurisdiction of substance. Its removal from the Financial Action Task Force’s (FATF) enhanced monitoring list has further bolstered its reputation as a respected International Financial Centre (IFC).

The GHA Licence provides significant opportunities for multinational companies by enabling them to consolidate their administrative, operational, and financial activities in Mauritius. The country is ranked first in Africa and 13th globally in the World Bank’s‘ Ease of Doing Business 2020’ report, making it a preferred destination for regional headquarters.

Key advantages of Mauritius include a robust legal and regulatory framework, a highly competitive tax regime, and a broad network of double tax treaties. The country also offers a skilled workforce, complemented by affordable professional services, including lawyers, accountants, and financial experts. Additionally, Mauritius hosts several of the world's largest banks, supports multi-currency banking, and has no exchange control restrictions, making it a favourable destination for multinational corporations.

These factors contribute to Mauritius’ growing reputation as a top-tier investment destination and a leading hub for cross-border investments into Africa and Asia.

Companies holding a GHALicence are required to provide at least three of the following services to a minimum of three affiliates within their multinational group:

·      General administration and management.

·      Business planning, development, and coordination.

·      Economic and investment research and analysis.

·      Services related to the global headquarters in Mauritius.

GHA Licence holders benefit from an eight-year corporate income tax holiday, subject to meeting licensing criteria. Furthermore, Mauritius imposes no capital gains tax or withholding tax on dividends and interest, making it even more attractive for businesses.

In addition to the standard Global Business Company (GBC) licensing requirements, companies with a GHA Licence must fulfill specific economic substance conditions, such as:

·      Establishing a physical office in Mauritius.

·      Employing at least 10 professionals, with a minimum of two in managerial positions.

·      Incurring annual expenditure of at least MUR 5 million (approximately USD 150,000).

Mauritius also offers an occupational Permit (OP) for those looking to work and reside in the country.

‍This permit is available under three categories: Investor, Professional, and Self-Employed. Investor and Self-Employed permits are issued for up to 10 years and are renewable, while the Professional permit is valid for up to three years based on the employment contract. Additionally, Occupational Permits can be converted to a 20-year Permanent Residency Permit after three years, subject to meeting the relevant criteria.

Hiring staff.

Due to the number of fintech companies and our profile, most of the requests for hiring came for the profiles such as:

·      Directors.

·      Compliance/ AML officers.

·      Dealers in brokerage companies.

·      Accounting officers.

·      Back office employees, such as customer support.

Salaries:

·      The MONTHLY salary of a junior-med position in Mauritius varies from MUR 30,000 (App USD 670) to MUR 90,000 (AppUSD 2000)

·      For higher profile roles, such ascompliance/ AML officer we have seen a range of 1,750 – 3,500 USD per monthsalaries

·      For Dealers – an average salary of 2,000 –4,000 USD is to be expected depending on the background of the person

·      Directors with sufficient experience and motivation to run the business would require a salary of 3,500 – 7,000 USD per month depending on the profile and duties.

Taxation:

1.    Corporate.

Taxes in Mauritius depend on the type of the business the company is carrying out and can differ dramatically. For example, Mauritius authorized companies (ordinary international companies similar to IBC from the past) offer 0% tax on corporate income. Mauritius FSC authorized companies in their majority receive a tax exemption if CIGA (core income generating activity) requirements are met in Mauritius – and have an effective corporate income tax rate of 3%. Specialized licensed described above have a full tax exemption for a number of years. Other businesses usually see tax rate of 15% or similar.

2.    Individual.

Taxation on individual income is bracket based. The tax rates applicable for fiscal year 2023/24 areas follows:

Annual Chargeable Income - Rate of Income Tax

First Rs 390,000 – 0%

Next Rs 40,000 – 2%

Next Rs 40,000 – 4%

Next Rs 60,000 – 6%

Next Rs 60,0008 – 8%

Next Rs 300,000 – 10%

Next Rs 300,000 – 12%

Next Rs 300,000 – 14%

Next Rs 400,000 – 16%

Next Rs 500,000 – 18%

On the remainder – 20%

Examples of internationalcompanies with headquarters in Mauritius:

·      Ciel Group Ltd

·      BDO Solutions

·      Weaver Fintech

·      Africa Fintech

·      HLB Fintech Services

If you're looking for a great place to set up your business and hire a talented workforce, Mauritius could be the ideal location!

If you are interested in exploring opportunities to set-up your business in Mauritius and hire local staff, contact our team at HRFinEase for further information and we will provide you with the necessary information!

info@hrfinease.com